As struggling chains go, Toys R Us is opting for a fight-to-the-death strategy, with plans to open more than 100 new stores across the planet, including 19 new (or converted or relocated) stores in the U.S. Not bad for a chain that had to cancel an announced IPO in March—due to weak earnings—and then posted in June a first-quarter loss of $111 million, which was much wider than the prior year's loss of $60 million.
This aggressive store expansion certainly beats the traditional struggling retail tactic of repeatedly making cuts and going into the well-known retail death spiral. Having private ownership has its benefits.
The new stores will be appearing in 21 of the chain's current 36 countries and, the chain said, will reflect an additional 900,000 square feet of retail space.
The most aggressive expansion is planned for China. "Expanding its business in China has been a priority for Toys R Us and follows the launch of an e-commerce site and the opening of its first stores in Beijing last year," the chain said in a statement, which, for some reason presumably, referred to itself in the third-person. "By the end of the year, the company plans to operate 51 stores in 27 cities throughout China. In October 2011, Toys R Us acquired the majority stake in its business in Greater China and Southeast Asia from Fung Retailing. With this agreement, the existing Toys R Us licensed operations in this region became 70 percent majority owned and controlled by Toys R Us, Inc. and 30 percent owned by Fung Retailing."
The second biggest store-growth move is in its home country, with those 19 new stores in the U.S. including nine outlet stores, which the chain said was "the largest number in a single year since it began opening these smaller format stores in 2010." When done, Toys R Us said it will have 25 outlet stores in the U.S..
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